A Two-in-One Tower

Condos Above, Rentals Below, Near Madison Square Park

The upper portion of the 40-story tower rising at Park Avenue South and East 28th Street will have 81 luxury condos developed by Toll Brothers City Living. Floors 2 through 22 will be rentals, developed by Equity Residential.Credit
Katherine Marks for The New York Times

While a team approach to real estate development is not unusual, a new residential project near Madison Square Park is putting a different spin on the concept. Instead of a single high-rise created by multiple partners, the building is essentially split in half between two partners.

At the corner of Park Avenue South and East 28th Street, the soaring, angular 40-story building, designed by the architect Christian de Portzamparc, will offer 81 condominiums across its top 18 floors, from studios to three-bedrooms, plus penthouses. These are being built by Toll and will be reached through their own lobby at 400 Park Avenue South. Condo owners also will have exclusive access to a 27th-floor indoor and outdoor amenity space.

Floors 2 through 22, meanwhile, will have rental apartments, from studios to three-bedrooms, developed by Equity. To be called Prism at Park Avenue South, this rental portion will likely have the address 402 Park Avenue South, but will be entered on 28th Street through its own lobby.

All residents, however, will share a 15,000-square-foot basement amenity space, with a theater, fitness center and 60-foot swimming pool.

The arrangement wasn’t always harmonious — there was some back and forth over what kind of material should line the walls of a lounge area in the basement, for instance. (The partners chose dark wood panels.)

But in a city where sites are scarce, competition fierce and land prices high, the developers were willing to put up with some annoyances to help defray costs on the roughly $400 million project, which are hefty even for well-established companies, said David Von Spreckelsen, the president of Toll Brothers City Living.

The city had already approved plans for a large building that had been drawn up for the site under a previous developer, and creating a partnership to tackle the project seemed to make more sense than opting to build a smaller building.

“It was really just too much square footage otherwise,” said Mr. Von Spreckelsen, who added that for Toll, anything with more than 100 condo units usually takes too long to sell out to be profitable.

George Kruse, an Equity vice president who used to work for Toll, a connection that helped the unusual deal come together, agreed, “We loved the location, but we were kind of wrestling with the size.”

Toll, which is spending about $155 million on its half, will offer glass counters, Miele appliances and marble vanities. Because the units are on the building’s upper stories, many will also have expansive views from floor-to-ceiling windows.

When the condo’s amended offering plan is approved by the state attorney general’s office, which is expected within weeks, these units will likely be priced at about $3,000 a square foot, or starting at $1.2 million for studios, said Todd Dumaresq, a Toll marketing manager. In late May, a list of people interested in the project was 4,000 names long, he added.

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The Equity units will feature synthetic-stone counters, oak-strip floors and Whirlpool appliances. Equity’s portion is costing $245 million, said Mr. Kruse, who added that rents will be in the $80-a-square-foot range, or about $3,300 a month for the cheapest studios, which will be higher, on average, than at other Equity properties in the city.

These rentals will be ready by the end of the year, though the condos will not open until 2015, the developers said.

Equity will also be the landlord of the building’s two storefronts, which total about 5,200 square feet.

Although Equity’s apartment finishes may not be as fancy as those in the condos, the company seems to have acceded to Toll’s wish that the amenity space look luxurious. The area will include textured Venetian plaster walls and a landscaped courtyard.

“The condo guys are looking for high-end finishes, while the apartment guys usually like middle-of-the-road stuff,” Mr. Kruse said. “But we thought that because of the exterior design of the building, we had to carry a certain look and feel throughout” the common areas.

The building’s design, which is heavy on glass and has protruding sections that seem to levitate over Park Avenue, is by the same award-winning architect who designed One57, the Extell Development Company condominium in Midtown.

The city approved the de Portzamparc design when it was completed for an apartment building that A & R Kalimian Realty, the previous owner, had planned there. And rather than tweak it and be subjected to another lengthy approval process, Toll and Equity decided to keep it.

To avoid future in-building fights, about, say, how to pay for roof repairs, there will be a board established for the whole building, separate from the standard condo board, on which Equity will have a seat.

Hybrid buildings like this one may be rare, but they are not entirely unknown. The Related Companies has a few, like the Caledonia in West Chelsea, which has 190 condos atop 288 rentals, and One Carnegie Hill, which has 261 rentals and 200 condos.

But with costs of doing business in Manhattan remaining high, other developers may be forced to divvy up high-rises.

“Any time you have a big site, when someone is not comfortable taking it on themselves, I think you could see it again,” Mr. Von Spreckelsen said. “I know we could consider it.”